Above: Colin Barnett, Anna Bligh, Kristina Keneally, Julia Gillard and Paul Henderson after the COAG meeting (Andrew Taylor, AAP).
By Stephen Easton and Yasmin Noone
Commonwealth and state governments reached an agreement on the future of health funding over the weekend at the Council of Australian Governments (COAG) meeting in Canberra, with important implications for aged care.
The Heads of Agreement, signed by the Prime Minister, state premiers and territory chief ministers, touches on areas already targeted for systemic reform – dental health, mental health and aged care – and includes the agreement that all parties will “pursue further reforms” in these areas over the next three years.
Importantly for the sector, the Commonwealth will now assume full responsibility for funding, policy, management and delivery of a national aged care system.
Aged and Community Services Australia acting CEO Pat Sparrow said that while the document was light on details about aged care, it had to be seen in the context of the Productivity Commission’s (PC) inquiry and its draft report, Caring for Older Australians.
“The PC is dealing with the question of reform, which will link to this agreement,” Ms Sparrow said. “It is true to say that there is not much in the communiqué [on aged care] but the governments have recommitted to reforming aged care, and to opening the door around Home and Community Care (HACC).
“I don’t think we are going backwards [with this agreement]. It’s a steadying of the course.”
Sparrow also noted that Victoria and Western Australia were now considering the changes to roles and responsibilities for HACC, originally proposed by Kevin Rudd and set out in the National Health and Hospitals Network Agreement.
“That’s a step forwards, as they previously said that they wouldn’t be part of it. Now the door is open for a bit of negotiation.”
The COAG agreement also reaffirmed the federal government’s commitment to reform of primary health care, with all leaders agreeing to pursue the establishment of Medicare Locals, organisations aimed at relieving some of the pressure on hospitals by bringing together consumers, doctors, nurses, allied health professionals and state-funded community health providers to administer local health care services.
On top of its contribution to base funding for hospitals, the Commonwealth agreed to contribute no less than $16.4bn over six years to ‘efficient growth funding’, increasing its share to 45 per cent from July 2014, and half from July 2017.
Efficient growth funding will be allocated back to the states and territories for public patient services on the basis of activity, and for other hospital services as well as teaching, training and research through block grants.
Under the new deal, which avoided Kevin Rudd’s earlier demand for a third of the states’ GST revenue, all hospital funding will go into a national pool, and the eight separate state and territory funding bodies will be replaced by a single national one.
When discussing the need for reform in aged care, mental health and dental health, all parties acknowledged that the increased federal funding for hospitals will “particularly benefit those areas of public hospital services where gaps continue, such as mental health”, according to the Heads of Agreement.
Any residual money left over from the Commonwealth’s $16.4bn commitment will be allocated to services that reduce demand for hospital beds, including chronic disease management, preventive medicine, mental health services and programs for hospital avoidance and early discharge.